Industry: Brewing & Distilling
Founder Brian Dunn looks back on his iconic brewery's roots, and towards its future in the always evolving ecosystem of Colorado craft beer.
After graduating from Colorado State University in 1985, Dunn worked in agriculture, building farms in developing countries for six years, then got a master's in environmental policy and management at University of Denver.
"I never took a job doing it," says Dunn. "I got out of grad school and thought, 'I don't think really want to do this.' I was actually on a flight to Fresno for a job interview. I started writing the business plan on the airplane: 'I want to do a packaging brewery. I don't want it to be a restaurant.'"
Quite a bit has happened in the years since, as Great Divide has balanced innovation and a commitment to craft with growth on its way to becoming Denver's largest brewery. As the company approaches the quarter-century mark, Dunn reflects on a career in craft beer.
"I don't think I had a 25-year outlook," he says. "It's a lot bigger than I ever imagined -- and more complicated."
Dunn's latest complications are two facilities -- Ballpark and RiNo -- and more salespeople: Great Divide has about 15 reps split between Colorado and other markets. Plus, there's the brewing side of it: "We're brewing some beers now that require pasteurization. They're trickier beers."
After a canning line went live with the RiNo facility in 2015, the format quickly became Great Divide's primary format. "Cans are our largest single package, about the same as draft and more than bottles," says Dunn. "Colorado skews way higher than cans."
Dunn expects to build out the RiNo facility from packaging plant and distribution hub to Great Divide's production brewery in 2019, give or take. "We call that phase two and we won't build phase two until this place is at capacity," he explains. "Phase two is mostly a production facility, but it might include a restaurant as well."
The current brewhouse at Ballpark "has a capacity of 55,000 to 60,000 barrels, so we probably need to at that level for a while. We're going to do 40,000 barrels [in 2017]."
That number makes Great Divide the largest brewery in Denver city limits. "Breckenridge moved, Flying Dog is gone, so we're probably the largest brewery in Denver proper," says Dunn.
The brewery took a step back in 2016 in order to take a stride towards phase two. "We dipped last year," says Dunn. "We had a production decline last year, and we'll be up this year from a production standpoint 10 to 15 percent."
He says the 16 percent dip (from 41,900 barrels to 35,300) was largely due to streamlining and updating the selection. "We got rid of a few brands: Lasso, Nomad, and Hoss went from a year-round to a seasonal," he says "They didn't fit in the lineup anymore, and we needed them to go so we could bring other beers in. Lasso was a session IPA and it wasn't really moving. Nomad was a great beer; it did well in some markets, but not here. We can't keep it for just California, so we got rid of it."
As far as new beers go, "Hazy IPA has been a big beer for us so far," says Dunn. "It's draft-only and Colorado-only. It's got a 30-day shelf life so it's really difficult to manage on a wider distribution basis."
"We have a new IPA coming out for us in spring of 2018 called Heyday IPA," says Dunn. "It's an IPA with more contemporary hops. It's a different IPA than Titan in that it's lower ABV, lower color, lower bitterness. It's a little more like the Hazy IPA but with a longer shelf life." Great Divide is also coming out with a new seasonal canned gose in summer 2018.
After Colorado, Great Divide's top markets are Southern California, Oregon, Washington, and Texas. With distribution in 25 states, Great Divide needs "more people on the street" to grow, says Dunn.
"It takes a lot of people to manage wholesalers and the business of letting the accounts know about the beer. We've added a lot of salespeople out of state, we're adding salespeople in state. It just takes a lot of people to do that."
"The wholesalers are busy, they have a lot of beers, so it's really up to us to let the bars and restaurants and liquor stores know about it."
On the other side of the business, Dunn says he likes to support local suppliers of hops and malt. "If the quality's great and the logistics are great, we buy from them," says Dunn. "We are buying from local suppliers and local growers."
One of them has nothing to do with the beer itself: For the promotion of the flagship Yeti Imperial Stout, Great Divide has ordered a number of Yeti suits from Frank Coffman in Boulder. "Those suits are the greatest," says Dunn. "They're so much better than the $100 suits we were getting."
And that's representative of another thing he likes about Colorado's craft brewing business: the collegiality. As far as Dunn is concerned, there's room for everybody.
"The taprooms have really changed this business, and that's been a great thing," he says. "Most neighborhoods now have great local breweries. I think that's been a really cool evolution of the business. They're good for everybody. I don't see them as competitors. They're helping drive exposure to great beer. There are constantly new breweries to check out. That's the fun part of it."
Is craft beer primed to plateau? "I think it'll keep growing," Dunn answers. "We're not done yet. Urban neighborhoods will see more breweries, suburban neighborhoods, mountain towns -- there will be a lot more. And I think everybody can fit in. I really do."
Favorite beers: "I hate that question," says Dunn. "I drink all of our beers, I really do. At our house, they're all there."
Beyond Great Divide, Dunn is similarly noncommittal. "It's hard to narrow down. I drink Avery, Odell, Cerebral, Odd13, Melvin. I drink Firestone. There's so many. I drink whatever beer stirs my fancy or I haven't had in awhile."
Challenges: "Logistically, just the number of new beers," says Dunn. "We need to have a lot of new beers. Innovation is important, and we love it. It keeps us stimulated as brewers and as businesspeople. But there are logistical challenges with that: packaging changes, and approvals on labels, and inventory of packaging. It's easier to make fewer beers. It's harder to make more beers. We're making a lot of smaller-batch beers, and it's challenging."
"Our salespeople can handle the draft accounts, but it's harder to do small runs in cans and bottles. There are minimums on cans, and they're expensive. Sometimes we want to bring a beer out, but it's a little bit below the threshold. Packaging small-run beers is tough."
"But it's what people responds to," he adds. "We see it here. People come into the bar and ask, 'What's new? What's new? What's new?'"
Consolidation is another challenge. "When big beer buys craft, I think that impacts us," says Dunn. "I'm mostly concerned about pricing in the market, and a lot of these beers are brewed at AB facilities. I don't think that qualifies as craft anymore.
"Goose Island kegs are so inexpensive right now, and they're made at the Fort Collins AB plant. Is that craft? I don't think so. They get it sold based on price. I don't want to compete on price. It's not what we do. I also don't think it's very transparent. Goose Island should be sold as 'Made at AB,' and it's not."
Opportunities: "We'd like to deeper in the markets that we're in, so we're putting salespeople out in states where we haven't before," says Dunn, highlighting Chicago, Boston, St. Louis, and Florida as targets for 2018.
He sees IPAs as a continued vehicle for growth. "IPAs are the workhorse, and I don't see that changing. The styles will change a little bit. High ABV, West Coast, citrusy, piney IPAs were the thing a couple years, and it just changes. But that's what's really fun about our business: It's constantly changing."
Needs: "Continued growth in the local market is really good for us," says Dunn. "We've had a great year growing in Colorado. We're up about 10 percent. Our year-end goal is 14 percent and I think we'll get there."
He adds, "It's important to us. About 60 percent of our beer is sold in Colorado so it's really grow our presence here and reach more beer drinkers."